The premise behind creating a European eco-label is to offer a simple, effective way for European citizen investors, particularly numerous in France and Germany, to have the opportunity to choose a financial product with a European star logo, which indicates that their investment is “green”. This proposal appears in the European Commission’s Action Plan for Financing Sustainable Growth, released on 8 March.
As President of the European Commission, Valdis Dombrovskis, explains, "Having a European eco-label for financial products makes it possible to promote climate-friendly investments, just as it does for organic products, clothing and housing".
We will propose EU-labels for green financial products, such as green bonds or investment funds. Like existing labels for organic food, clothing, or housing, these labels would highlight climate friendly investments. #sustainablefinanceeu pic.twitter.com/4rDGPLvMq1
— Valdis Dombrovskis (@VDombrovskis) 8 mars 2018
The project is ambitious in that green environmental funds still constitute a very small market (165 funds totalling €22 billion, according to the Novethic study released in March 2017). But much like the TEEC label (Energy and Ecological Transition for Climate), launched by the French government in 2015, the European eco-label must also be able to encourage market activity by making it possible to respond to an identified demand. All surveys show that customers are ready to invest in these types of financial products, provided they are available and that they guarantee environmental credibility by removing the risk of greenwashing.
It is for this reason that the European eco-label project for financial products must be based on the green and climate-friendly business framework that is to be published in 2019. In this respect, it will be similar to the TEEC French model, for which Novethic acts as auditor, linking taxonomy demands, fossil and nuclear energy exclusions, and the exclusion of controversial companies.
In order to launch this project on a European scale, it is necessary to create a financial product category that reflects existing eco-labels. This model is already in place in Austria and the Nordic countries. Novethic is delighted to be able to participate in this new challenge: mobilising the investments of European citizens for the advancement of the Union's ecological and energy transition!
Anne-Catherine Husson-Traore,, Directrice générale de Novethic